This weeks analysis on the Commitments of Traders Report (COT) regarding the Commercials shows some trading opportunities.
COT Analysis on AUD
The AUD has a reading of only 2 to 5 on the COT index which means within the last 13,26,52,104 and 156 weeks the Commercials had not been that short on the AUD. It is just a matter of time for the AUD to lose strength. The Willco Indicator also refers to the open Interest and shows a reading of only 5 points – also indicating a downward move ahead.
The seasonal pattern on the AUD has it’s final low at the end of Octobre (19th Octobre). The seasonal move downwards is already in line since 16th of July where the price still went upwards. Now as we see on the chart there is a doubletop forming on the daily chart where price could bounce off nad go downwards.
COT Analysis on USD
The Dollar is gaining strength as more and more commercials are going long. The COT-Index has a reading between 94 and 98 on all timeframes. The WillCo also has a reading of 98 indicating the dollar to gain strength.
The Seasonal Pattern in a post election year shows the dollar in still losing strength until start of Octobre.
I expect the Dollar to gain strength within the next weeks. Last friday the market over-reacted to the news during the day.
COT Analysis on EUR
The Eur has gained strength as the Dollar lost it’s strength – regarding the price itself. The Commercials are expecting the EUR to go down. It will be just a matter of weeks – especially if the Dollar gains power the EUR is expected to go down sharply. If the ECB is not to rise the interest rate the market will react in a big decline on EUR.
The COT-Index shows readings of 1 to 7 on all timeframes which is extreme! The WillCo allso has a reading of 15 which is about to go extreme. On 1.2000 the price will go down becaus of a psychological „triple 0“ number and a big resistance forming in that area. I will place a short limit there with a wider SL of about 200 pips. When going down the price will move way more than that. I expect the EURUSD to go down to 1.1600 until the end of the year.
Big News will be expected on the German election on 24th of September.
